Elon Musk: SpaceX Signed Lower Revenue Deals with Airlines for Starlink

Elon Musk, CEO of SpaceX, said on Wednesday that the company signed lower revenue deals with airlines for its Starlink satellite internet service, aiming to make it more accessible. The statement comes after Delta Air Lines chose Amazon's (AMZN) Leo service over Starlink.

Details of the Statement

Musk explained that SpaceX intentionally signed deals that yield lower revenues with airlines, because the primary goal is to improve access to high-speed internet on flights, not to maximize profit from these contracts. He added that the company seeks to deploy the service widely.

Competitive Context

This development comes amid growing competition between SpaceX and Amazon in the satellite communications market. Delta Air Lines, one of the largest US carriers, chose Amazon's Leo service for in-flight internet, bypassing Starlink. This decision may have pushed SpaceX to adopt a more flexible pricing strategy.

What This Means for Investors

Musk's comments indicate that SpaceX prioritizes user base growth over profit margins in the aviation sector. While Delta's choice of Amazon's service may create competitive pressure, SpaceX's strategy could help it win contracts with other price-sensitive airlines. Amazon investors may view this win as a sign of Leo's strength.